BRM – February 2021 monthly update

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A WORD FROM THE MANAGER
In January Barramundi returned a gross performance loss of (0.9%)
and an Adjusted NAV loss of (1.2%). This compares to the ASX200
Index which returned +0.1% (70% hedged into NZ$).
January was a relatively benign month for the ASX share market.
Strong consumer spending through Christmas and into the new
year resulted in a number of positive trading updates from retailers
in the month. This resulted in the consumer discretionary sector
(which returned +7.5%) leading the market performance in
January.
This was closely followed by the financials sector which returned
6.0% in the month. Financials were helped by an improving
earnings outlook (see portfolio news below) as well as rising
interest rates. In line with international trends, the Australian 10yr
government bond yield rose from 0.97% to 1.13% in the month.
Conversely, this move in rates had a dampening effect on the
real estate sector which lagged the market, falling -3.3% in the
month. Expectations surrounding the speed with which COVID
related travel restrictions could be lifted were also tempered in the
month. Along with the interest rate move, this negatively impacted
the likes of Sydney Airport (-10.8%) and Qantas (-7.2%) which
contributed to the -1.5% fall in the industrials sector overall.
Portfolio News
January tends to be a relatively quiet month on the news front
for our portfolio companies although we did have a few trading
updates and notable announcements.
ARB (+14.1% in A$) provided a positive trading update. Sales
of ARB vehicle accessories grew +21.6% in the 6 months to
December 2020 as it benefitted from border closures and increased
domestic tourism related demand. December was a record sales
month, and its customer order book remains strong.
Our bank shareholdings Westpac (+9.1%), ANZ (+4.5%),
NAB (+4.2%) and CBA (+1.7%) also performed strongly in the
month. The Australian economy has continued to rebound from
the pandemic which has translated into expectations for lower
bad debt provisions for the banks than originally anticipated.
Coupled with rising interest rates, a strong housing market and
the aforementioned strength in consumer spending, this has
underpinned a round of upgraded earnings forecasts by bank
analysts and bolstered their share prices.
In late January Ansell (+5.8%) upgraded its June 2021 year
earnings guidance for the second time in recent months. When
the company delivered its FY20 result in August it anticipated FY21
earnings growth of 3% to 13%. It is now signalling an 11% to
19% increase driven by the ongoing need for personal protective
equipment in response to the COVID-19 pandemic. Taking a
long-term view we expect current elevated levels of protective
equipment demand to abate. But we do believe hygiene practices
have been fundamentally changed which should benefit Ansell’s
sustainable earnings.
Industry feedback points to Woolworths (+3.9%) having had a
strong trading period through December and January. Woolworths
is another beneficiary of border closures, increased domestic
tourism and higher in-home consumption of food. Its early and
continued investment in its online business has also seen it take
market share from competitors.
AUB Group (+0.2%) announced the sale of its shareholding
in Altius Group. This completes AUB’s exit from its Health and
Rehabilitation operations. Under relatively new CEO Mike Emmett,
AUB has simplified and concentrated its focus on its core insurance
broking and underwriting agency businesses. Cash proceeds from
the Altius sale will be around $57m which will be used to reduce
debt and provide balance sheet capacity for future acquisitions in
AUB’s core operations.
Resmed (-0.04%) delivered another solid result for its December
2020 quarter. Normalised earnings were 17% higher than in the
December 2019 quarter. This was despite the absence of any
COVID-related ventilator sales in the quarter. In addition, Resmed
faced a major headwind from lower new patient setup volumes
because potential CPAP users remain cautious about visiting
doctors and sleep labs for diagnosis in the COVID-19 environment.
In this context Resmed’s Americas devices revenue growth of +1%
was credible. Americas masks & accessories revenue was also
8% higher showing the on-going benefit of efforts to improve
distributors’ patient resupply programmes and CPAP users’
heightened focus on respiratory health in the current environment.
Internationally, there was healthy growth in ‘Rest of World’
revenue for both devices (up +10% constant currency) and masks
& accessories (up +12%). The next few quarters may see Resmed
report declines in devices revenue as the on-going recovery in new
patient setup volumes is unlikely to offset the US$200m of COVID
1
Share Price Premium to NAV (including warrant price on a pro-rated basis and using NAV to four decimal places).
MONTHLY UPDATE
February 2021
BRM NAV
$
0.79
$
0.96
Share Price
Warrant PricePREMIUM
1
$
0.21 27.9
%

as at 31 January 2021

SECTOR SPLIT
as at 31 January 2021
KEY DETAILS
as at 31 January 2021
FUND TYPE
Listed Investment Company
INVESTS IN
Growing Australian companies
LISTING DATE
26 October 2006
FINANCIAL YEAR END
30 June
TYPICAL PORTFOLIO SIZE
20-35 stocks
INVESTMENT CRITERIA
Long-term growth
PERFORMANCE OBJECTIVE
Long-term growth of capital and
dividends
TAX STATUS
Portfolio Investment Entity (PIE)
MANAGER
Fisher Funds Management Limited
MANAGEMENT
FEE RATE
1.25% of gross asset value
(reduced by 0.10% for every 1%
of underperformance relative to
the change in the NZ 90 Day Bank
Bill Index with a floor of 0.75%)
PERFORMANCE
FEE HURDLE
Changes in the NZ 90 Day Bank
Bill Index + 7%
PERFORMANCE FEE
10% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$0.65
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
211m
MARKET CAPITALISATION
$203m
GEARING
None (maximum permitted 20%
of gross asset value)
4
%
INFORMATION
TECHNOLOGY
20
%
21
%

INDUSTRIALS
18
%
COMMUNICATION
SERVICES

HEALTHCARE
26
%
4
%

FINANCIALS
CONSUMER
STAPLES
6
%
CONSUMER
DISCRETIONARY
related ventilator sales that occurred over the March to September
quarters of 2020. But Resmed’s longer-term underlying prospects
remain sound. It has a long growth runway remaining in its core
sleep business. It is also expanding its presence in respiratory care
(COPD) and SaaS software for out-of-hospital healthcare services.
Fineos (-2.8%) gave a market update in late January. Calendar
2020 was a record year, with 10 major North American insurance
carriers going live with Fineos software. While the outlook for
further customer contracts remains strong, the timing of new deals
will likely be impacted by the economic uncertainty associated with
COVID-19.
In mid-December oOh!media (-4.5%) had given a trading update
that guided to revenue of $420-430m for 2020. This is a 35%
decline on 2019 revenue reflecting the flow-on impact of COVID-
related lockdowns on audience levels for outdoor advertising.
Based on broader industry statistics released in January oOh!media
does not seem to have ceded any market share. Also, on a more
encouraging note, outdoor advertising spend continues to recover
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
as evidenced by December spend being “only” 25% down on
a year ago. At its worst back in May 2020, monthly spend had
plunged by 71%.
There was no company specific news for either Nanosonics
(-14.9%) nor Xero (-11.5%) during the month. Both companies
have delivered strong share price performance over the latter
part of 2020 on the back of credible earnings results and trading
updates. Xero had also been added to the MSCI Global Standard
Index in November which was supportive.
Portfolio Changes
There were no material portfolio changes during the month.
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The Barramundi portfolio also holds cash.

JANUARY’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month in Australian dollar terms
Typically the Barramundi portfolio will be invested 90% or more in equities.
ARB
+14
%
WESTPAC
+9
%
AUDINATE
-9
%
NANOSONICS
-15%
XERO
-12
%
5 LARGEST PORTFOLIO POSITIONS as at 31 January 2021
WISETECH
6
%
CSL LIMITED
8
%
SEEK
6
%
CARSALES.COM
6
%
CBA
5
%
The remaining portfolio is made up of another 21 stocks and cash.
Oct
2006
Oct
2007
Oct
2008
Oct
2009
Oct
2010
Oct
2011
Oct
2012
Oct
2013
Oct
2015
Oct
2016
Oct
2014
Share Price/Total Shareholder Return
Share PriceTotal Shareholder Return
$
0.00
$
0.50
$
1.00
$
1.50
$
2.00
$
2.50
$
3.00
$
3.50
Oct
2017
Oct
2018
Oct
2019
Oct
2020
TOTAL SHAREHOLDER RETURN to 31 January 2021
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return(0.7%)+17.1%+48.2%+30.8%+21.2%
Adjusted NAV Return(1.2%)+9.7%+15.0%+14.8%+12.7%
Portfolio Performance
Gross Performance Return(0.9%)+10.9%+17.8%+18.4%+16.2%
Benchmark Index^+0.1%+11.9%(1.8%)+7.0%+10.2%
PERFORMANCE to 31 January 2021
^Benchmark index: S&P/ASX Small Ords Industrial Gross Index until 30 September 2015 & S&P/ASX200 index (hedged 70% to NZD) from 1 October 2015
Non–GAAP Financial Information
Barramundi uses non–GAAP measures, including adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return. The rationale for using such non–GAAP measures is as follows:
»adjusted net asset value – the underlying value of the investment portfolio adjusted for capital allocation decisions, after expenses, fees and tax,
»adjusted NAV return – the return to an investor after expenses, fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency hedging before expenses, fees and tax, and
»total shareholder return – the return combines the share price performance, the warrant price performance, the net value of converting any warrants into shares, and the dividends paid to shareholders. It assumes
all dividends are reinvested in the company’s dividend reinvestment plan, and that shareholders exercise their warrants, (if they were in the money), at warrant expiry date
All references to adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return in this monthly update are to such non–GAAP measures. The calculations applied to non–GAAP
measures are described in the Barramundi Non–GAAP Financial Information Policy. A copy of the policy is available at http://barramundi.co.nz/about-barramundi/barramundi-policies/
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Disclaimer: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by
necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Barramundi Limited and its officers and directors make no representation as to its accuracy or
completeness. The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from an authorised
financial adviser should be taken before making an investment. To the extent that the update contains data relating to the historical performance of Barramundi Limited or its portfolio companies, please
note that fund performance can and will vary and that future results may have no correlation with results historically achieved.
Barramundi Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 489 7074 | Fax: +64 9 489 7139
Email: enquire@barramundi.co.nz | www.barramundi.co.nz
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Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777 | Fax: +64 9 488 8787
Email: enquiry@computershare.co.nz | www.computershare.com/nz
ABOUT BARRAMUNDI
Barramundi is an investment
company listed on the New Zealand
Stock Exchange. The company
gives shareholders an opportunity
to invest in a diversified portfolio
of between 20 and 35 quality
growing Australian companies
through a single, professionally
managed investment. The aim of
Barramundi is to offer investors
competitive returns through capital
growth and dividends.
CAPITAL MANAGEMENT STRATEGIES
Regular Dividends
»Quarterly distribution policy introduced in
August 2009
»Under this policy, 2% of average NAV is targeted
to be paid to shareholders quarterly
»Dividends paid by Barramundi may include
dividends received, interest income, investment
gains and/or return of capital
»Shareholders who prefer to have increased
capital rather than a regular income stream have
the opportunity to participate in the company’s
dividend reinvestment plan (DRP)
»Shares issued to DRP participants are at a 3%
discount to market price
»Barramundi became a portfolio investment entity
on 1 October 2007. As a result, dividends paid to
New Zealand tax resident shareholders have not
been subject to further tax
Share Buyback Programme
»Barramundi has a buyback programme in place
allowing it (if it elects to do so) to acquire its shares
on market
»Shares bought back by the company are held as
treasury stock
»Shares held as treasury stock are available to be re-
issued for the dividend reinvestment plan
MANAGEMENT
Barramundi’s portfolio is managed
by Fisher Funds Management
Limited. Robbie Urquhart
(Senior Portfolio Manager),
Terry Tolich (Senior Investment
Analyst) and Delano Gallagher
(Investment Analyst) have prime
responsibility for managing the
Barramundi portfolio. Together
they have significant combined
experience and are very capable
of researching and investing in the
quality Australian companies that
Barramundi targets. Fisher Funds is
based in Takapuna, Auckland.
BOARD
The Manager has authority
delegated to it from the Board
to invest according to the
Management Agreement and
other written policies. The
Board of Barramundi comprises
independent directors Alistair
Ryan (Chair), Carol Campbell,
Andy Coupe and Carmel Fisher.
Warrants
»On 26 August 2020 a new issue of warrants (BRMWF)
was announced
»The warrants were issued at no cost to eligible
shareholders in the ratio of one warrant for every four
Barramundi shares held
»The warrants were allotted to shareholders in October
2020 and the warrants listed on the NZX Main Board
from early October 2020. (Information pertaining to
the warrants was mailed/emailed to shareholders in
September 2020)
»The Exercise Price of each warrant is $0.70, adjusted
down for dividends declared during the period up to
the announcement of the final Exercise Price. Dividends
totalling 1.45 cents per share have been declared to
date and there are three more dividends expected to be
declared in the remaining period up to the announcement
of the 29 October 2021 exercise price
»The Exercise Date for the new warrants (BRMWF) is
29 October 2021
»The final Exercise Price will be announced and an Exercise
Form sent to warrant holders in September 2021